The incidence of diabetes is increasing rapidly as the percentage of the population ages and becomes more obese. According to the National Center for Health Statistics diabetes is now the seventh leading cause of death in the US. The approach for first-line treatment of type 2 diabetes mellitus (T2DM) has moved away from the use of the TZD class of insulin sensitizers as safety concerns over their use have grown. This is unfortunate as TZDs have consistently shown robust insulin sensitization efficacy for treatment of T2DM. While weight gain is associated with use of TZDs, the major safety concerns include edema, plasma volume expansion (PVE/hemodilution) which is linked to cardiomegaly and heart failure, increased risk of bone fractures and specific to pioglitazone, increased risk in bladder cancer. Studies in animal models and in man have shown that indicators of weight gain and PVE, while not eliminated, can be minimized without loss of insulin sensitization by the use of partial agonists of PPARG (minimal agonism of the receptor as compared to TZDs regardless of concentration of compound). While it is unclear if the bone fracture risk can be minimized with use of such agents, these studies clearly demonstrate that insulin sensitization afforded by PPARG ligands does not correlate with the level of classical agonism they induce (AF2-mediated agonism). We demonstrated that the insulin sensitization afforded by partial agonist and TZD treatment correlates with the ability of these drugs to block the obesity-induced phosphorylation of PPARG at S273 (pS273). In 2011, we showed that the PPARG ligand SR1664 does not induce classical agonism yet potently blocks pS273, and is efficacious as an insulin sensitizer in rodent models of diabetes. Recently, we have made significant advances on the drug-like properties of SR1664 resulting in compounds such as SR11023 and SR10171 that demonstrate efficacy in obese mice following once-a-day oral administration. These compounds represent a significant advancement towards developing PPARG modulators with an improved therapeutic index; however, several questions remain; 1) how does pS273 of PPARG repress genes linked with obesity and diabetes, and what other PTMs are involved? We anticipate that factors are recruited to or displaced from the PPARG complex in response to pS273 and these factors influence expression of a subset of target genes. Thus, when ligands block pS273, the interaction of these factors with the complex is altered. We will determine what these factors are and if they contribute to the mechanism of action of our novel compounds; 2) what are the structural determinants that facilitate the action of SR11023 and SR10171. We will use proven technologies to answer this; and 3) will the lack of classical agonism fully dissociate efficacy from the major side effects of PPARG modulators, particularly their effects on bone? Here we will use chemical and structural biology with appropriate cell and animal models coupled with comprehensive proteomic and genomic analysis to address these questions. The proposed research will provide insight into the molecular components of the PPARG signaling pathway, structural determinants for generating high affinity non-agonist ligands that block pS273, and a better understanding of the impact of modulating PPARG on bone. While pioglitazone will become generic soon, its association with bladder cancer risk and its negative effects on bone will ultimately limit its use. Therefore, a significant need exists for a safer yet efficacious inslin sensitizer for treatment of T2DM.